I just read some interesting stuff from the Digital Entertainment Group. It seems that DVD sales are dropping fast, perhaps going the way of the 8-track soon  as digital delivery and Blu-Ray are gaining in consumer confidence and adoption. That means, all your online video efforts are far more important now than they have ever been. Plus, we can all stop decorating our Christmas trees with all those discs we keep replacing every 10 years for a new format. The total dollar amount spent on video lost 4% during the first nine months of the year and was only a terribly low $12.6B (that was sarcasm). However, DVD sales actually lost more, but that loss was made up by a rise in video-on-demand. Well, mostly. There was obviously still a loss of dollars. However, with digital delivery generally cheaper than discs it could be that the actual sales were up but the ticket prices were down. I haven’t got the specific numbers so I’m just spitballin’ there.

Blu-Ray definitely helped overall as it topped $1B for the year already, even though sell-through was down 8% for the first three quarters. But overall, sell-through was down only 6%, a full 2%  less thanks to electronic sell-through (that’s what I’m talkin’ bout!). Blu-Ray sales did grow with over three million set tops selling, 104% jump from 2009 Q1-Q3 (could be due to lower prices and a better economy). They estimate that there are 21.1M installed households now.

Digital distribution was 13.%% of overall spending and consists of electronic sell-through (EST) and video-on-demand. EST was up 37% reaching $432M with VOD  jumping 20% and ending the nine-month period at $1.2B. Boom Pow!

“While we continue to encounter tough market conditions, there are a number of positive trends emerging, particularly in some of the industry’s key growth areas,” said Ron Sanders, President, DEG and President, Warner Home Video. “Blu-ray continues to show strong growth in every category, new release packaged media sell-through is up, and digital distribution is gaining significant momentum as we move into the fourth quarter.”

The DEG compiles quarterly sales data for various products within the home entertainment category, including Blu-ray, DVD and HDTV. The industry association compiles its data based on input from member companies, retailers and industry association tracking sources.